Title:Illiquidity and Under-Valuation of FirmsAuthor(s):GALE, Douglas; GOTTARDI, PieroDate:2009Type:Working PaperSeries/Number:EUI ECO; 2009/38Abstract:We study a competitive model in which market incompleteness implies that debt-financed firms may default in some states of nature and default may lead to the sale of the firms’ assets at fire sale prices when markets are ...